BMI View: Brazil's construction sector saw an overall contraction in 2014, as the industry suffered from a subdued domestic economy, an uncertain political environment in the run up to the Presidential elections in October 2014 and a drop-off in demand in the wake of the FIFA World Cup. Moving forward, the scale of projects in the pipeline meanswe are forecasting more positive growth in 2015 and beyond,although we note that over the longer term,this growth is largely unsustainable.

Brazil has instigated a substantial infrastructure investment programme under Programa de Aceleração do Crescimento (PAC) which is due to enter its third phase in 2015. The country has also set up a USD235bn concessions programme between 2015 and 2018 which will see a large number of construction projects across the transport network taking place. Although the potential investment is substantial, these concessions have been subject to extensive delays and legal hurdles, and the funding of the programme is uncertain. A large volume of energy and utilities projects are also in the pipeline, contributing to our long-term growth forecasts however Brazil continues to struggle to attract foreign investment and fundamental issues in the country's business environment will continue to undermine the growth potential in the construction sector.

Key Developments and Forecasts

Brazil's overall construction sector is expected to grow by 2.3% in 2015 with more positive growth of 4.3% forecast for 2016.

Total capital investment is expected to increase from USD385.4bn in 2015 to USD866.5bn at the end of the current forecast period in 2023.

The Inter-American Development Bank has approved loans of USD200mn for the state of Ceará and USD for the state of Paraná to develop various social and transport infrastructure projects.

While wider delays to port concessions are ongoing, about USD1.7bn of port infrastructure projects have been approved by Brazil's National Port...

Table: Major Projects - Residential/Non-Residential Construction And Social Infrastructure

78

Industry Risk Reward Ratings

80

Brazil - Infrastructure Risk/Reward Ratings

80

Risk/Reward Ratings

80

Rewards

80

Risks

81

Latin America - Infrastructure Risk/Reward Ratings

82

Table: Latin America Infrastructure Risk/Reward Ratings

88

Company Profile

89

Grupo Camargo Correa

89

Odebrecht

93

Global Industry Overview

98

Global Infrastructure Overview

98

Methodology

104

Industry Forecast Methodology

104

Sector-Specific Methodology

105

Risk/Reward Rating Methodology

109

Sector-Specific Methodology

110

Table: Infrastructure Risk/Reward Rating Indicators

110

Table: Weighting Of Indicators

111

The Brazil Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.

Key Benefits

Benchmark BMI's independent infrastructure industry forecasts for Brazil to test other views - a key input for successful budgetary and planning in the Brazilian infrastructure market.

Target business opportunities and risks in the Brazilian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Brazil.

Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).

Industry SWOT Analysis

Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:

Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.

The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).

BMI’s Infrastructure Risk Reward Index

BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.

Market Overview

An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’